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The fall of every year brings the obligation for federal contractors and subcontractors to file annual reports with the Equal Employment Opportunity Commission (EEOC) and the Veterans Employment and Training Service (VETS). While this has become something of an annual ritual, organizations that may be reviewed by the U.S. Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) should give special attention to these reports during 2015. There are changes to the report due to VETS, and there are new ramifications for the manner in which information is reported to the EEOC.

The VETS-100 and VETS-100A Reports

Federal contractors and subcontractors have been filing a report with VETS for a number of years. The original report provided to VETS, the VETS-100, requested information on the classes of veterans covered under older versions of the regulations on protected veterans. These classes were as follows:

  • Vietnam Era Veterans
  • Recently Separated Veterans (i.e. persons within one year of separation from service)
  • Other Protected Veterans (i.e. active duty wartime/campaign badge veterans)
  • Special Disabled Veterans

After the passage of the Job for Veterans Act in 2002, the veterans regulations were eventually changed, and federal contractors and subcontractors were asked to fill out a revised version of the VETS report, the VETS-100A. The VETS-100A used the classes that are currently protected under the federal regulations. These classes are as follows:

  • Recently Separated Veterans (i.e. persons within three years of separation from service)
  • Other Protected Veterans (i.e. active duty wartime/campaign badge veterans)
  • Disabled Veterans (basically a slight variant on Special Disabled Veterans)
  • Armed Forces Service Medal Veterans (a category covering veterans who had received an Armed Forces Service medal for participation in certain military operations where a campaign badge was not awarded)

Organizations that had federal contracts or subcontracts signed on or after December 1, 2003 were to file the VETS-100A report, while organizations that had unmodified federal contracts or subcontracts signed before this date were to file the VETS-100 report. The rare organization that had both types of contracts was to file both types of reports.

The VETS-100 and VETS-100A reports had certain common elements.

  • Organizations were asked to provide information on the number of employees within each of the veteran categories noted above, as well as the total number of employees.
  • Organizations were also asked to provide information on the number of new hires within each of the veteran categories noted above, as well as the total number of new hires.
  • Data was to be reported by EEO-1 category.
  • For multi-site employers, information was to be provided for the corporate headquarters and for each facility of 50 or more employees. Facilities of less than 50 employees could be reported separately or all such facilities within one state could be combined.

By 2014, there should have been effectively no organizations in the United States required to file the VETS-100 report, since there should have been no unmodified federal contracts or subcontracts from before December 1, 2003 held by any organization.

VETS Changes the Nature of the Annual Report on Protected Veterans

In 2014, VETS announced that it was changing the manner in which federal contractors and subcontractors would be required to provide information. The new VETS report, named the VETS-4212 report, continues to request information on employees and new hires. However, there are several important changes from the VETS-100 and VETS-100A reports.

  • The VETS-4212 report does NOT require that organizations report on each category of protected veteran. Instead, organizations must provide information on the total number of protected veterans and the total number of employees within each EEO-1 category.
  • The VETS-4212 report does NOT require that organizations report on new hires within each EEO-1 category. While reporting on employees within each EEO-1 category remains mandatory, reporting on new hires within each EEO-1 category is optional for the VETS-4212 report. Organizations still must report on the total number of protected veterans hired and the total of all hires.

Organizations will be filing the VETS-4212 report for the first time in 2015. There is no longer a requirement (nor an option) to file either the VETS-100 or the VETS-100A report.

Ramifications of the New VETS-4212 Report

The changes to the report required by VETS has certain surprising ramifications for federal contractors and subcontractors. The VETS-4212 report should theoretically be easier for organizations to complete, since it no longer requires the submission of information on hires by EEO-1 category, and it no longer requires reporting on each individual protected veteran classification. However, organizations that have pre-established reports in their HR systems set to automatically provide data in the formats found in the VETS-100 or VETS-100A reports will need to work with vendors on restructuring these reports to follow the formats found in the VETS-4212 report.

The biggest surprise growing out of the changes to the VETS-4212 report involves its ramification for surveying employees. Federal contractors and subcontractors have been required, both by the VETS regulations and by OFCCP’s regulations, to survey new hires for each protected veteran status. When OFCCP issued its revised veterans regulations in September of 2013, the requirement to survey new hires (i.e. post-offer applicants) stated that the survey was to follow the format used in the report due to the Veterans Employment and Training Service. OFCCP clearly expected that VETS would continue to require that federal contractors and subcontractors provide information on each protected veteran classification separately. Instead, shortly after OFCCP’s revised veterans regulations became effective, VETS changed its reporting requirements so that organizations would only need to report on the combined number of protected veterans rather than reporting on each protected veteran category.

What does this mean for federal contractors and subcontractors?

  • Federal contractors and subcontractors are no longer required to survey new hires for each protected veteran classification. Instead, they can survey new hires in the same way they survey applicants, by asking whether the new hire is a protected veteran or not. The new hire survey needs to provide a definition for each protected veteran category, but does NOT need to provide new hires an opportunity to choose one or more of these categories.
  • Federal contractors and subcontractors will no longer report to VETS or OFCCP on each category of protected veteran. Neither VETS nor OFCCP will have any data on how many employees belong in any particular protected veteran category.

The change to the VETS report also has some odd ramifications for federal contractors and subcontractors. For example, there is one category, recently separated veterans, that is a date-driven category. Since organizations are no longer required to request information on each separate veteran category, it appears there is also no requirement to gather information on discharge date from new hires. Thus, certain employees who would otherwise fall out of protected veteran status after the three-year window on separation from service will still show in HR systems and on certain reports as being in protected veteran status. Organizations may want to consider if they should collect information on whether a new employee is a recently separated veteran along with the date of that individual’s discharge in order to provide accurate reports to VETS. However, there appears to be no requirement in either OFCCP’s regulations or VETS regulations to do so.

As another example, OFCCP’s regulations provide certain protections for disabled veterans. However, if organizations are no longer required to survey for each separate protected veteran status, there will be no way to know which employees fall into the disabled veteran category. That means it will be difficult (if not impossible) to know which employees should receive the extra protections afforded to disabled veterans.

New Ramifications for the EEO-1 Report

While there are significant changes in the report due to the Veterans Employment and Training Service, there are no real changes occurring to the EEO-1 report that is due to EEOC this year. Federal contractors and subcontractors (other than universities) with 50 or more employees must file this report by September 30, and all employers with 100 or more employees must also file this report regardless of whether they are federal contractors or subcontractors.

EEO-1 reports were previously important to OFCCP because they helped to form the database used to select federal contractors and subcontractors for compliance reviews. There is a box on the EEO-1 report that asks a rather convoluted question about whether organizations have federal contracts or subcontracts. If an organization answers “Yes” to this question, the organization enters the OFCCP database, and becomes a potential subject of a compliance review. It’s important to note that organizations falsely answering “No” to this question are subject to civil and criminal penalties.

OFCCP has long required the submission of EEO-1 reports as part of the package of items requested when an affirmative action compliance review opens. These reports were previously requested as item 7 in the itemized listing that accompanies the letter opening a compliance review. Item 7 has been renumbered as item 15 in the revised version of the itemized listing that was released in October of 2014.

With revisions to OFCCP’s Federal Contract Compliance Manual (FCCM) and OFCCP’s itemized listing, there are new ramifications for organizations in regard to the EEO-1 report.

  • The FCCM, which underwent extensive revisions in 2013, includes a section where OFCCP compliance officers are instructed to conduct a trend analysis of the EEO-1 reports submitted. Organizations must submit three years of EEO-1 reports at the start of a compliance review, and thus compliance officers will have three years of data to review. Compliance officers are instructed to review the distribution of jobs within an organization’s workforce, the numerical changes in the total workforce and in particular EEO-1 categories, and the increase or decrease in minority and female representation in various areas.
  • The itemized listing now requires that organizations undergoing a compliance review must submit individualized compensation data on each employee in the workforce analysis of the affirmative action plan that is prepared under Executive Order 11246. Among the fields that must be submitted on each employee along with base wage, race, and gender are EEO-1 category and job group. This means that OFCCP can compare individualized data as found in the compensation submission against the aggregate data found in the EEO-1 reports.

Actions to Take Regarding EEO-1 Reports

With OFCCP giving additional scrutiny to EEO-1 reports and individual data that may be part of these reports, there are a number of actions that federal contractors and subcontractors should consider.

  • Review EEO-1 reports before they are submitted to OFCCP as part of a compliance review. Organizations should determine what OFCCP might find when conducting trend analyses of these EEO-1 reports.
  • Determine whether there are inconsistencies between affirmative action job groups and EEO-1 categories assigned to each employee. In many organizations, EEO-1 categories are not assigned by the same set of employees that make determinations about affirmative action job groups. While job group assignments should correspond to EEO-1 categories, it is not unusual for there to be inconsistencies in these two sets of data. For example, someone assigning EEO-1 categories may place outside sales managers in EEO-1 category 1.2 (First/Mid-Level Officials and Managers) while the person assigning job groups may place outside sales managers in a sales job group (which would potentially be EEO-1 category 4, Sales Workers). In the past, this may not have been an issue. However, since the compensation request from OFCCP now asks for both EEO-1 category and job group, the agency may raise questions about any inconsistencies. It is important for those assigning EEO-1 categories and those assigning job groups to work together to develop consistent reports.
  • For multi-facility employers, determine how information for each facility will be reported to OFCCP. Since OFCCP uses information from EEO-1 reports as one means to determine which organizations and which facilities will undergo a compliance review, organizations should make a strategic determination as to how facilities will be shown on EEO-1 reports. Some employers configure their affirmative action plans differently than the way in which they configure their EEO-1 reports. For example, some organizations combine smaller facilities with larger facilities on EEO-1 reports while excluding these smaller facilities from the larger facility’s affirmative action plan. OFCCP may now compare the total number of employees in an EEO-1 report against the total number in an affirmative action plan submitted as part of a compliance review, and may raise questions if these totals don’t match.

Finding More Information

LocalJobNetwork is doing a webinar on Tuesday, August 25, where the revised itemized listing, including the compensation item, will be discussed. Check the LJN website for more information on this webinar.

Please note: Nothing in this article is intended as legal advice or as a substitute for any professional advice about your organization’s particular circumstances. All original materials copyright © HR Analytical Services Inc. 2015